Auditors berated for not reporting faults

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Two former audit partners of Deloitte Touche Tohmatsu have been reprimanded for failing to report faults in the accounts of a property syndicate that had $200 million in funds under management, held on behalf of more than 3000 investors.

The Australian Securities and Investments Commission said the two Brisbane-based auditors - Sarah Merridew, now of Launceston, and Mark O'Shea - had not properly carried out their responsibilities when auditing the accounts of Landmark Property Syndicates.

The Companies Auditors and Liquidators Disciplinary Board found that the pair did not recognise that Landmark breached its own constitution when it bought land from related parties without approval.

The board found that the duo failed to tell ASIC that the managed investment schemes in six syndicates had not lodged their financial reports by a deadline of September 30, 2001. Ms Merridew, among other things, failed to properly document her audit procedures and did not inform ASIC that reports for 2002 would not be filed by the deadline.

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Landmark Property Syndicates surrendered its dealers licence two years ago after admitting it had issued a fund-raising prospectus containing false and misleading statements. Ms Merridew resigned as a registered company auditor and promised she would not seek re-registration for five years. Mr O'Shea has undertaken not to sign off on company audit reports for a year.